What Is a Growth Stock?

A growth stock is a stock that is expected to expand at a pace that is considerably higher than the market average. The majority of these stocks do not pay dividends. This is because growth stock issuers are often businesses that seek to reinvest any profits in order to increase growth in the short term. When investors buy growth stocks, they expect to profit from capital gains when they sell their shares in the future.
Growth stocks may be found in any industry or sector, and they generally have a high price-to-earnings (P/E) ratio. They may not be generating money right now, but they are anticipated to in the future.
Growth stocks might be hazardous to invest in. Because they rarely pay dividends, the only way for an investor to profit from their investment is to sell it later. When it comes time to sell the shares, investors suffer a loss if the firm does not perform successfully.

Growth Stocks emphasise increasing yields such as IBM, Visa. Value stocks generally want to increase their capital first over yields.

  1. Growth stocks present stability, sustainability for your investment. Yet, value stocks offer periodic opportunity.

  2. Growth stocks had been tested and approved by market, so those are less risky than value stocks, because first market should analyse that if there is any value. It is advantage and maybe disadvantage with another vintage point.